Adani Ports and Special Economic Zone (APSEZ) said that its composite scheme to acquire Sarguja Rail Corridor Pvt Ltd (SRCPL) has been approved by the Ahmedabad Bench of National Company Law Tribunal (NCLT) and it will now consolidate all rail assets under a single entity Adani Tracks Management Services Pvt Ltd.

This consolidation will allow APSEZ, which targets to build 2,000 km of track length by 2025, to participate in Indian Railways’ public private partnership (PPP) projects without having to compete with other group companies, it said in a statement. The composite scheme of arrangement is made effectivefrom April 1, 2021. Also, the acquisition being a related-party transaction, APSEZ said it adopted a fully transparent approach with minority shareholders and creditors for approval.

To improve earnings

Once consolidated, SRCPL will add ₹ 450 crore or five per cent of APSEZ's total Ebitda (earnings before interest, tax, depreciation and amortisation), the statement said. Therefore, this acquisition creates a significant business value for APSEZ as a transport utility.

APSEZ, holding a rail portfolio of 620 km, had mooted a proposal to acquire 70 km of Sarguja Rail from another Adani group company in 2019.

“As per the national rail plan 2020, Indian Railways will invest over ₹3 lakh crore in next 10 years to construct new rail lines. Further, the government’s shift in focus from road to rail as the preferred mode of transport, an obvious choice both economically and environmentally, will require significant participation of the private sector. Therefore, this acquisition creates significant business value for APSEZ as a transport utility,” said Karan Adani, CEO of APSEZ.

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